The appointment was annnounced after Sir Richard Greenbury, M&S boss, relinquished the role of chief executive but will continue as non-executive chairman until the annual general meeting in 2000.

Peter Salsbury, managing director of general merchandise, will step into the breach next February.

The company also said that deputy chairman Keith Oates will retire early in the new year.

Keith Oates said he "would very much welcome the challenge of one more full-time role in the UK or overseas."

The decision follows one of the most crucial board meetings in its 114 year history on Wednesday.

BBC's Peter Gould on the turmoil at the historical store

The meeting was called to decide who will run the company in the future, amid fears that the flagship store chain has lost its way on the High Street.

M&S has been thrown into turmoil after a collapse in profits and disappointing sales in the run up to Christmas.

Bitter battle

The retailer's headquarters have been the scene for a escalating boardroom battle

The ailing performance lead to a bitter boardroom battle as leading M&S directors vied to takeover control of the group.

Mr Oates had made a last ditch attempt to win support from other top executives.

Share price pressure

Murray Steele: Succession battle has exacerbated downturn in results

M&S has been under pressure from its investors to finalise succession plans as the uncertainty surrounding the group hit its share price.

Matthew Orr, partner at stockbroker Killick & Co said: "Investors just want to have an answer on who will take over.

"This is a company which one has historically been prepared to rely on for complete stability and now it is taking knock after knock."

Work cut out

M&S is under attack from UK textile producers about plans to buy more of its clothes from abroad.

M&S claims it had been forced into the move to save costs, but the plans have caused an uproar from textile trade unions and could lead to thousands of UK job losses.

M&S has also had to put its overseas expansion plans on hold due to the downturn in the world's economy.